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Charting Your ESG Path – Developing Strategies to Respond to Climate Change

Charting Your ESG Path – Developing Strategies to Respond to Climate Change

Kristen Haines, Rebecca Jeffriess

In today's rapidly evolving business landscape, sustainability can’t just be an exercise to meet the disclosure requirements in the upcoming mandatory sustainability reporting regime, it's a crucial aspect that can make or break a company's long-term success. As the impacts of climate change become increasingly apparent, businesses, regardless of size, must proactively address climate-related risks and opportunities as part of their core business strategy, rather than relegating them to mere side tasks.

A climate related strategy, should be approached in the same manner as any other strategy and a streamlined approach to effectively implement a strategy for climate is:

Identify Risks

Conduct a comprehensive assessment to identify specific climate-related risks to your organisation, including both physical risks, such as impacts from extreme weather events; and, transitional risks, such as supply chain disruptions, regulatory changes and reputational risks.

Set Targets

Establish clear and measurable targets aimed to reduce these identified risks.  These targets should be ambitious yet attainable, providing opportunities to achieve progress toward climate risk mitigation.  Sometimes, it may not be possible to set targets straight away. Establishing a baseline can be a worthwhile target in this interim period where many businesses are taking their first steps toward a sustainability strategy.  

Take Action

Implement concrete measures to address the identified risks, aligning with broader sustainability objectives.  This may involve investing in renewable energy, optimizing operational processes, and adopting sustainable procurement practices.  Look to listed companies in your industry already preparing voluntary sustainability reports for insights into effective strategies, that you may be able to leverage in your own organisation.   Additionally, engage with sustainability-focused organizations or industry bodies, to understand what is already happening in your industry. 

Establish Timeframes

Define short-term, medium-term and long-term deadlines for achieving set targets.  This ensures a structured approach to goal attainment while maintaining momentum towards a more sustainable business. 

Monitor Progress

​Setting climate strategy shouldn’t be a set and forget process, you should be regularly tracking progress against established targets to gauge performance and identify any deviations from the plan.  This should include discussing the progress with the Board or committee that has climate risks in their remit.  It is not something that can be addressed just by management, without the commitment of the Board. 

Review and Adjust

​Setting targets around sustainability is incredibly challenging, especially when it is an emerging area that you have not previously engaged in. Accordingly, it is important that you continually review and adjust your strategy as you go, so that you still meet your long-term targets. It may be that you achieve more than you had expected or alternatively find that it is more challenging and progress is slower. It is ok and not abnormal to adapt your targets and actions as you go. 

Next Steps

Moore Australia is here to help you to develop and implement your sustainability strategy. Please download the recording of our presentation done in conjunction with WorkforClimate. If you would like to discuss how Moore Australia can assist you please contact your local Moore Australia representative.